Looking for a high squeeze? Try Andeavor (ANDV) on for size. (September 20, 2018)
ANDV
I want to look at a new stock here; I’m not sure I have ever even really covered this stock, Andevor ( NYSE: ANDV ), it is an oil and gas refiner.
This is the deal: This is what I would call a high squeeze or tight squeeze, whatever you want to call it. The criteria for this is, first of all, the stock has to be in a fairly tight trading range. I just use Bollinger Bands, it really needs to about 5 percent, this is well, lower than that. And it also needs to be at or close to the 52-week high and then it also needs to be above the 50 and 200-day moving averages.
Right now, on a real simple scan that I have, I have 168 stocks that fit this criteria. They don’t all look like this, obviously, but they all have the same characteristics, so I just kind of narrow them down, look for things to do and this would be one of those and here’s why: I’m not looking at this stock as an imminent breakout, buy it now because it is going to breakout to 160.00 or 165.00. I don’t know whether it is going to do that or not. I am looking at this now and I am seeing a low-risk entry point.
If you are looking for an energy stock, and that is a good thing to be looking for, this is a stock that has been working. But it is so close to, not just the 50-day moving average but really just kind of established support right around 150.00, the 50 is right down here at the intraday low of 148.75 so you can see the stock actually traded down intraday and essentially tagged the 50-day moving average and then rebounded.
The way you set up this trade is, you set a stop just a little bit BELOW today’s intraday low, right around 148.00, and then the only way you get stopped out is if the stock undercuts today’s intraday low. It is a pretty tight stop, 3 percent, put it a little bit below 148.00 and then you just take a small position. And then you would only add to that position IF the stock starts breaking out to a new high.
So this is a way to get involved in a stock that you are bullish on, that you think is going to work. You are taking an early entry; if you are in a track meet and you are a sprinter, if you can kind of get a little head start before the starter pistol goes off without the starter seeing you, that’s a good thing, right? You get a little head start on the trade.
So here, if you are buying a little bit here at support, if the stock reverses and goes lower then you are stopped out for a small low-percentage loss and a very small number of shares. But then if the stock works in your favor you are adding to a lower cost basis position while other traders are just getting started. So you are in a real position of power by starting a new position here a little bit earlier.
Anyway, check that out and see if it works. If the stock starts trading though, keep in mind, I am not stock picking here I am chart reading. If the stock starts trading down here, I have no edge on this stock; I don’t know what the heck this thing is going to do. I am just looking at it saying, “If this, then that.” In other words, if it holds above the 150.00 level then it is probably going to go higher.
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